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on Labour Economics |
| By: | Buttler, Dominik (Poznan University of Economics); Sierminska, Eva (LISER (CEPS/INSTEAD)) |
| Abstract: | We examine supply-side determinants of transition from the wage and salary sector to self-employment of women and men living Poland. The empirical analysis is made possible due to a unique and under explored longitudinal survey -- Social Diagnosis – that contains rare indicators such as job preferences and work events. The empirical results in the 2007-2015 period indicate that women and men transitioning into self-employment are differently motivated. In terms of job attributes, women find independence at work and for those in professional occupations a job matching their competences as a desirable job attribute, while for men the lack of stress, a good salary and independence is key. The analysis of work events and its influence on self-employment weakly confirms the glass-ceiling hypothesis. In line with other research, our analysis indicates that financial constraints strongly determine the entry into self-employment. A key human capital determinant is past entrepreneurial experience indicating a slow, cautious transition process into self-employment. |
| Keywords: | risk, self-employment, work conditions, gender, Poland |
| JEL: | D31 G11 J61 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12643&r=all |
| By: | OH, Joonseok; ROGANTINI PICCO, Anna |
| Abstract: | This paper illustrates how households' heterogeneity is crucial for the propagation of uncertainty shocks. We empirically show that an uncertainty shock generates a drop in aggregate consumption, job finding rate, and inflation: the aggregate consumption response is mainly driven by the consumption response of the bottom 60% of the income distribution. A heterogeneous-agent New Keynesian model with search and matching frictions and Calvo pricing rationalizes our findings. Uncertainty shocks induce households' precautionary saving and firms' precautionary pricing behaviors, triggering a fall in aggregate demand and supply. The two precautionary behaviors increase the unemployment risk of the imperfectly insured, who strengthen their precautionary saving behavior. When the feedback loop between unemployment risk and precautionary saving is strong enough, a rise in uncertainty leads to a decrease in inflation. Contrary to standard representative agent New Keynesian models, our model qualitatively and quantitatively matches the empirical evidence on uncertainty shock propagation. |
| Keywords: | Uncertainty; Inflation; Unemployment risk; Precautionary savings |
| JEL: | E12 E31 E32 J64 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2019/02&r=all |
| By: | Nuvolari, Alessandro; Tartari, Valentina; Tranchero, Matteo |
| Abstract: | We introduce a new bibliographic quality indicator for English patents granted in the period 1700-1850. The indicator is based on the visibility of each patent both in the contemporary legal and engineering literature and in modern authoritative works on the history of science and technology. The indicator permits to operationalize empirically the distinction between micro and macroinventions. Our fi ndings indicate that macroinventions did not exhibit any speci c time clustering, while at the same time they were characterized by a labor-saving bias. These results suggest that Mokyr's and Allen's views of macroinventions, rather than conflicting, should be regarded as complementary. |
| Keywords: | industrial revolution; macroinventions; microinventions; patents |
| JEL: | N74 O31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13958&r=all |
| By: | Barnichon, Régis; Zylberberg, Yanos |
| Abstract: | Unemployment insurance (UI) programs traditionally take the form of a single insurance contract offered to job seekers. In this work, we show that offering a menu of contracts can be welfare improving in the presence of adverse selection and moral hazard. When insurance contracts are composed of (i) a UI payment and (ii) a severance payment paid at the onset of unemployment, offering contracts with different ratios of UI benefits to severance payment is optimal under the equivalent of a single-crossing condition: job seekers in higher need of unemployment insurance should be less prone to moral hazard. In that setting, a menu allows the planner to attract job seekers with a high need for insurance in a contract with generous UI benefits, and to attract job seekers most prone to moral hazard in a separate contract with a large severance payment but little unemployment insurance. We propose a simple sufficient statistics approach to test the single-crossing condition in the data. |
| Keywords: | Adverse Selection; moral hazard; Unemployment insurance |
| JEL: | D82 J65 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13959&r=all |
| By: | Christine L. Exley; Judd B. Kessler |
| Abstract: | In job applications, job interviews, performance reviews, and a wide range of other environ-ments, individuals are explicitly asked or implicitly invited to assess their own performance. In a series of experiments, we ?nd that women rate their performance less favorably than equally performing men. This gender gap in self-promotion is notably persistent. It stays just as strong when we eliminate gender di?erences in con?dence about performance and when we eliminate strategic incentives to engage in self-promotion. Because of the prevalence of self-promotion opportunities, this self-promotion gap may contribute to the persistent gender gap in education and labor market outcomes. |
| Keywords: | promotion, gender gap, performance incentives |
| JEL: | J16 J60 C92 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-058&r=all |
| By: | Dhuey, Elizabeth (University of Toronto); Eid, Jean (Wilfrid Laurier University); Neill, Christine (Wilfrid Laurier University) |
| Abstract: | Full-day kindergarten programs are expanding across North America, driven by a policy focus on early childhood development. These programs also affect parents' budget sets and may lead to changes in labour market outcomes. We exploit the unusual nature of Ontario's government school system to examine parents' labour supply response to a move from half-day to full-day kindergarten in Ontario's French – but not English – schools. We find no robust evidence of labour supply effects for fathers in two parent families, and only some limited and modest effects on mothers in two parent families. For single mothers, the point estimates suggest large and statistically significant effects on employment and hours of work, and in particular for working longer hours. |
| Keywords: | kindergarten, early education, maternal labour supply |
| JEL: | I28 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12648&r=all |
| By: | Hanzhe Zhang |
| Abstract: | I build an equilibrium investment-and-marriage model to explain stylized facts about education, income, and marriage for Americans born in the twentieth century that had not been explained in a unified way. The most novel finding is a theoretical explanation for why women attend college at a higher rate and earn a lower average income than men. Differential fecundity and an equilibrium marriage market form the basis of my explanation. The model also accounts for gender-specific relationships between age at marriage and income, as well as the evolving relationship between age at marriage and spousal income for women. I provide evidence to support my theory and calibrate the model to conduct counterfactual analyses. |
| Keywords: | college gender gap, earnings gender gap, marriage age, nonassortative matching |
| JEL: | C78 D10 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7872&r=all |
| By: | Bachmann, Ronald (RWI); Bechara, Peggy (RWI); Vonnahme, Christina (RWI) |
| Abstract: | We examine occupational mobility and its link to wage mobility across a large number of EU countries using worker-level micro data. In doing so, we document the extent, the individual-level determinants and the consequences of occupational mobility in terms of wage outcomes and structural change across the EU. In addition, we identify potential explanations for the observed cross-country variation. Our results show that on average, 3% of European workers change their occupation per year, and that the extent of occupational mobility differs strongly by country. Individual characteristics play an important role for person-specific occupational mobility, but have little explanatory power for differences between countries. Occupational mobility is strongly associated with earnings mobility, and occupation movers are more likely than job movers to experience a downward rather than an upward earnings transition; by contrast, changing occupation voluntarily is more often followed by an upward wage transition. As opposed to composition effects, employment protection legislation seems to play an important role for explaining cross-country differences in occupational mobility through its impact on overall job mobility. |
| Keywords: | occupational mobility, job mobility, wage mobility, European labour markets, EU-SILC |
| JEL: | J62 J63 P52 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12679&r=all |
| By: | Gaurav Khanna; Carlos Medina; Anant Nyshadham; Christian Posso; Jorge A. Tamayo |
| Abstract: | We investigate the effects of job displacement, as a result of mass-layoffs, on criminal arrests using a novel matched employer-employee-crime dataset in Medellín, Colombia. Job displacement leads to immediate earnings losses, and an increased likelihood of being arrested for both the displaced worker and for other youth in the family. We leverage variation in opportunities for legitimate reemployment and access to consumption credit to investigate the mechanisms underlying this job loss-crime relationship. Workers in booming sectors with more opportunities for legitimate reemployment exhibit smaller increases in arrests after job losses. Greater exposure to expansions in consumption credit also lowers the job loss-crime elasticity. |
| JEL: | J63 J65 K42 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26313&r=all |
| By: | Ivana Fellini (Dipartimento di Sociologia e Ricerca Sociale, Università degli Studi di Milano-Bicocca); Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | Improved legal status has been found to be associated with better employment chances and higher wages for immigrants, although causal effects remain difficult to ascertain due to severe endogeneity issues. This article contributes to the debate on the "citizenship/legal status premium" in the labour market by providing quasi-experimental evidence based on the 2007 EU Eastern Enlargement, following which immigrants from Romania and Bulgaria, the new EU Member States, exogenously acquired the EU citizen status. The article also contributes to the literature on legal status effects, mainly focused on single-country studies, by comparing "older" destination countries of Western Europe with "newer" ones of Southern Europe. Results show that while improved legal status is associated to higher employment rates in Western European countries, the association is null or even negative in Southern European countries, where immigrants are more strongly urged to be employed. However, improved legal status is more strongly associated with better job quality in Southern Europe, where immigrants are usually segregated in low-skilled jobs. The article concludes that possible effects of improved legal status should be interpreted taking into account the different institutional contexts and models of immigrants’ labour market incorporation. |
| Keywords: | Legal Status; Ethnic penalty; EU enlargement; Labour market; Naturalisation; Southern Europe; Quasi-experiment |
| JEL: | A14 J61 J21 Z13 C10 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2019_11&r=all |
| By: | Ayal Y. Chen-Zion; James E. Rauch |
| Abstract: | We model network formation in a firm. Agents learn about the quality of their working relationships with each other. Their good relationships become their networks. Accumulating relationships becomes increasingly costly, however. Over time agents become less open to forming relationships with others unknown to them, leading their networks to be front-loaded with agents they met near the beginning of their careers. The interaction of this dynamic with turnover yields predictions about the time pattern of history dependence in an agent’s network as a function of his tenure. Mutual openness of newly arrived agents in a firm also leads to the cross-section prediction of “cohort attachment,” a tendency for members of an agent’s hiring cohort to be disproportionately represented in his network. When members of a network formed within a firm are subsequently split across many firms, the desire to renew their successful working relationships can lead to job referrals. Former co-workers who provide referrals will be drawn disproportionately from the referred workers’ hiring cohorts at their previous employers. |
| JEL: | D85 J63 J64 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26358&r=all |
| By: | Nava Ashraf; Alexia Delfino; Edward L. Glaeser |
| Abstract: | Commerce requires trust, but trust is difficult when one group consistently fears expropriation by another. If men have a comparative advantage at violence and there is little rule-of-law, then unequal bargaining power can lead women to segregate into low-return industries and avoid entrepreneurship altogether. In this paper, we present a model of female entrepreneurship and rule of law that predicts that women will only start businesses when they have both formal legal protection and informal bargaining power. The model's predictions are supported both in cross-national data and with a new census of Zambian manufacturers. In Zambia, female entrepreneurs collaborate less, learn less from fellow entrepreneurs, earn less and segregate into industries with more women, but gender differences are ameliorated when women have access to adjudicating institutions, such as Lusaka's “Market Chiefs” who are empowered to adjudicate small commercial disputes. We experimentally induce variation in local institutional quality in an adapted trust game, and find that this also reduces the gender gap in trust and economic activity. |
| JEL: | J16 K40 O15 R12 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26366&r=all |
| By: | Michael Sposi (Southern Methodist University) |
| Abstract: | The age distribution evolves asymmetrically across countries, inuflencing relative saving rates and labor supply. Using a dynamic, multicountry trade model I quantify how demographic changes affected trade imbalances across 28 countries since 1970. Counterfactually holding demographics constant reduces net exports in emerging economies that experienced rising working age shares, and boosts them in advanced economies that experienced flatter, or declining, working age shares. This helps alleviate the allocation puzzle. On average, a one percentage point increase in a country's working age share, relative to the world, increased its ratio of net exports to GDP by one-third of a percentage point. |
| Keywords: | Demographics, Trade imbalances, Dynamics, Labor supply. |
| JEL: | F11 F21 J11 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1906&r=all |
| By: | Serafinelli, Michel (University of California, Berkeley); Tabellini, Guido (Bocconi University) |
| Abstract: | Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. Our main variable of interest is the number of famous creatives (scaled to local population) born in a city during a century, but we also look at famous immigrants (based on location of death). We first document several stylized facts: famous births and immigrants are spatially concentrated and clustered across disciplines, creative clusters are persistent but less than population, and spatial mobility has remained stable over the centuries. Next, we show that the emergence of city institutions protecting economic and political freedoms and promoting local autonomy facilitates the attraction and production of creative talent. |
| Keywords: | innovation, agglomeration, political institutions, immigration, gravity |
| JEL: | R10 O10 J61 J24 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12644&r=all |
| By: | Steven J. Davis; John C. Haltiwanger; Kyle Handley; Ben Lipsius; Josh Lerner; Javier Miranda |
| Abstract: | We examine thousands of U.S. private equity (PE) buyouts from 1980 to 2013, a period that saw huge swings in credit market tightness and GDP growth. Our results show striking, systematic differences in the real-side effects of PE buyouts, depending on buyout type and external conditions. Employment at target firms shrinks 13% over two years in buyouts of publicly listed firms but expands 13% in buyouts of privately held firms, both relative to contemporaneous outcomes at control firms. Labor productivity rises 8% at targets over two years post buyout (again, relative to controls), with large gains for both public-to-private and private-to-private buyouts. Target productivity gains are larger yet for deals executed amidst tight credit conditions. A post-buyout widening of credit spreads or slowdown in GDP growth lowers employment growth at targets and sharply curtails productivity gains in public-to-private and divisional buyouts. Average earnings per worker fall by 1.7% at target firms after buyouts, largely erasing a pre-buyout wage premium relative to controls. Wage effects are also heterogeneous. In these and other respects, the economic effects of private equity vary greatly by buyout type and with external conditions. |
| JEL: | D22 D24 G24 G34 J63 L25 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26371&r=all |
| By: | Francesco Bloise (University of Roma Tre, Italy); Michele Raitano (Sapienza University of Rome, Italy) |
| Abstract: | Using a rich longitudinal dataset built by merging administrative and survey data, this article contributes to the literature on intergenerational inequality by providing the first reliable estimate of the intergenerational earnings elasticity (IGE) in Italy based on actual father-son pairs and by comparing the size of the lifecycle bias when sons are selected by age or by potential experience (i.e., the distance from the year they ended their studies). Our findings confirm that Italy is a low-mobility country because in our baseline estimates, the IGE at sons’ potential experience level 6 is approximately 0.40 and is robust to various measures of fathers’ lifetime earnings. However, our results might be downward biased by the young age of sons. To measure the lifecycle bias and correct the IGE estimates, we run the “forward regression” of yearly earnings on lifetime earnings on a sample of workers followed for 30 years. We find that selecting sons by potential experience rather than by age reduces the lifecycle bias at young ages and that the “corrected” IGE is 0.47. |
| Keywords: | intergenerational earnings elasticity; lifecycle bias; attenuation bias; intergenerational inequality; Italy. |
| JEL: | J62 D31 D63 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2019-504&r=all |
| By: | Krzysztof Karbownik; Anthony Wray |
| Abstract: | We study whether childhood health capital affects school attendance, long-run occupational outcomes, and intergenerational mobility. We address this question in the context of London, England during the late-nineteenth century using the inpatient admission records of three large hospitals linked to population census records, from which we identify household characteristics and the patients’ siblings. Sibling fixed effects estimates indicate that boys with health deficiencies were 14.9 percent less likely to work in white collar occupations as adults and 13.9 percent more likely to experience downward occupational mobility relative to their fathers, in comparison to their brothers. This negative effect offsets 16.2 percent of the benefit of having a father in a high status occupation. We also explore medium-run mechanisms for both boys and girls, and find that poor childhood health reduced the likelihood of attending school by 2.5 and 4.1 percent, respectively. |
| JEL: | I14 J62 N33 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26368&r=all |
| By: | Nikoloz Kudashvili; Philipp Lergetporer |
| Abstract: | Discrimination against minorities is pervasive in many societies, but little is known about minorities’ strategies to avoid being discriminated against. In our trust game among 758 high-school students in the country of Georgia, ethnic Georgian trustors discriminate against the ethnic Armenian minority group. We introduce an initial signaling stage to investigate Armenians’ willingness to hide their ethnicity to avoid expected discrimination. 43 percent of Armenian trustees untruthfully signal to have a Georgian name. Signaling behavior is driven by expected transfers and non-pecuniary motives. This strategic misrepresentation of ethnicity increases Georgian trustors’ expected back transfers and eliminates their discriminatory behavior. |
| Keywords: | discrimination, trust game, experiment, signaling, adolescents |
| JEL: | C91 C93 D83 J15 J16 D90 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7861&r=all |
| By: | Grund, Christian (RWTH Aachen University); Sliwka, Dirk (University of Cologne); Titz, Krystina (RWTH Aachen University) |
| Abstract: | Drawing on two large German representative data sets, we analyze the role of works councils for the use of performance appraisals (PA). We distinguish between the incidence of performance appraisal systems as intended by the firm and their actual implementation on the level of the individual employee. We find that works councils tend to promote rather than restrict PA. Employees working in establishments with a works council are more likely to face a formal performance appraisal procedure. Works councils also act as a transmission institution for the actual use of an existing PA system – i.e. among the firms that claim to implement performance appraisals for all their employees, the likelihood of their employees actually having regular appraisals is substantially larger when works councils are in place. Moreover, the existence of works councils is positively related particularly to PA systems, which affects bonus payments. |
| Keywords: | performance appraisals, voice, works councils, performance pay |
| JEL: | M54 M12 J53 J83 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12670&r=all |
| By: | Bizopoulou, Aspasia |
| Abstract: | I provide evidence that task use at work by men and women in the same occupations is significantly different. The observed difference can account for the within-occupational gender-wage gap that is prevalent in many developed countries. Using data for thirteen European countries, I find that women consistently report spending less time than men on specific job tasks. The effect is exacerbated with fertility and selection into the labour force, however neither mechanism can completely account for the observed differences. The difference is also not accounted for by the type of occupations in which women are employed, nor their working hours and it is not driven by measurement error. Similarly to studies for the US and Australia, I find that a large portion of the gender wage-gap is found among individuals employed in the same occupational titles. However, controlling for both occupations and task use in an wage equation accounts for the entirety of the within-occupational gender wage-gap, for all countries in the sample. |
| Keywords: | task approach, gender wage-gap, occupations, Labour markets and education, J16, J24, J31, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:124&r=all |
| By: | Pastore, Francesco (Università della Campania Luigi Vanvitelli) |
| Abstract: | This paper aims to study the shortcomings and merits of the first experiment of quasi-market in the provision of employment services: the Lombardy DUL (Dote Unica Lavoro). This system, which has inspired the 2015 national reform within the Jobs Act, has reactivated and revitalized the sector by providing important job opportunities to jobless workers. The system has the typical problems of quasi-markets in the provision of public services (lion's share of private organizations; cherry picking; gaming). However, different expedients are devised in the program to minimize these shortcomings. The empirical analysis suggest that such phenomena if existent are at a physiological level. Analysis of the determinants of completing successfully the program provides non-trivial results as to, among others, the role organizations of different ownership type and of services provided. |
| Keywords: | public employment services, quasi-markets, cherry-picking, gaming, Lombardy region, jobs act |
| JEL: | H44 H52 H76 I38 J68 R23 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12662&r=all |